Growing An Industry: How Managed Is TennCare's Managed Care?

Abstract
In 1994 Tennessee moved virtually its entire Medicaid population and new eligibles into fully capitated managed care (TennCare). We analyze Tennessee's strategy, given limited existing managed care; and health plans' development of managed care infrastructure. We find signs of progress and developing infrastructure, but these are threatened by concerns over TennCare's financial viability and the state's commitment to TennCare's objectives. State policymakers seeking systems change need to recognize the substantial challenges and be committed to long-term investment.

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